Solvay

Solvay

Belgian chemical company Solvay S.A. (SVYZY.PK: News ,SVYSF.PK: News ) Monday said it agreed to launch a friendly takeover offer for French chemicals firm Rhodia SA (RHAYY.PK: News ) at 31.60 euros per share in cash. The deal framework agreement was signed Sunday, and the combination, with the highly complementary businesses, would result in a major player in chemicals, committed to sustainable development.
The per share price excludes dividend of 0.5 euros per share, and values the equity of Rhodia at 3.4 billion euros and the enterprise value being 6.6 billion euros.
The offer, which has been unanimously recommended by Rhodia's board of directors, will be launched in France and extended to the United States of America. The price represents a premium of 50 percent on Friday's closing share price of Rhodia, and a premium of 44 percent on its average closing share price over the last three months.
It is expected that the transaction will be net profit accretive from 2011. The annual cost synergies from the combination are estimated at 250 million euros within three years. Solvay said it does not plan any major downsizing, as two thirds of the synergies are expected from external cost optimization.
Brussels-based Solvay expects to fully finance the deal with its cash resources.
Solvay, which employs about 16,800 people in 40 countries, offers specialty polymers, in soda ash and hydrogen peroxide. Rhodia, which employs around 14,000 people, provides specialty materials, products for consumer markets and engineering plastics based on polyamide 6.6. In 2010, Solvay's consolidated sales amounted to 7.1 billion euros, and Rhodia's sales were 5.23 billion euros.
Of the combined total sales of 12 billion euros, 40 percent is generated in emerging markets. Meanwhile, 90 percent of its combined sales are realized in businesses where it is already among the top three worldwide.
Christian Jourquin CEO of Solvay, said, "We see the possibility of doubling our REBITDA to almost EUR 2 billion and creating a major global chemicals platform under the banner of Solvay."
Following the deal closure, which is expected by late August 2011, Rhodia's Chairman and CEO Jean-Pierre Clamadieu will join Solvay's Executive Committee in the role of Deputy CEO. Clamadieu is also intended to succeed Jourquin upon his retirement.
At the AGM in May 2012, Clamadieu will also be proposed for appointment to the board of directors of Solvay. Further, Gilles Auffret, COO of Rhodia, will be appointed as CEO of Rhodia and member of the Executive Committee of Solvay.
In the coming days, the company will file a tender offer conditional upon the approval by E.U. and U.S. anti-trust authorities and upon a minimum acceptance level of 50 percent plus one share.
SVYZY.PK closed Friday's trading at $11.94, up $0.25 or 2.14 percent.
Solvay last traded at 81.50 euros on March 29 in Frankfurt, down 0.20 euros or 0.24 percent.
Rhodia settled on Friday at 21.07 euros, up 0.41 euros or 1.96 percent in Paris.
Sources: http://www.rttnews.com

Solvay